25 Responses

1. I guess it would be asking far too much to expect the columns to even add up.

2. You refer to £1 billion of tax evasion, yet many of those items refer to matters which are clearly not tax evasion but tax avoidance loopholes which are now being closed. You may refer to them as tax abuse, but they are not tax evasion!

Actually FATCA (especially the UK version) is aimed at both avoidance and evasion.

Additionally most analysts consider Osborne’s figure to be wildly off the mark. It’s based on Liechtenstein and Swiss figures from their own disclosure agreements with the UK, not taking into account the completely different financial and regulatory environment in Jersey.

The truth is they will collect nothing like this figuer and they know it, The UK netted less than 2 million a year from the savings tax directive and given the billions on deposit in both islands it shows we are better regulated than most places. Also we have had automatic information exchange with the UK for two years something else that has proved to be a damp squid.

You leap at any opportunity to peddle your own stories and yet give half-hearted sound-bite responses to anyone who calls you on your claims. A little lesson in the meaning of hypocrisy may be in order Richard.

One way or the other you’re being boxed into a corner as your “secrecy jurisdictions” prove increasingly able to show just how transparent they are. Maybe it’s time you admitted your position and turned to real problem areas such as Delaware.

Then focus on them as real secrecy jurisdictions. When you use biased (and false) terms like Jersey “caving” in to FATCA (I was act the Jersey Finance meeting, the vast majority wanted to sign up as soon as possible) it is difficult not to have a fairly prickly reaction to you deliberately misrepresenting the situation.

Richard this fron todays Guernsey Press from our Ex Chief Minister who was also a former Guernsey Treasury Minister.

The UK Budget and what it means for Guernsey

Yesterday morning I sat between our Treasury and Resources Minister and Chief Minister at a presentation by a major international firm of accountants on the latest UK budget. We needed our calculators and as I hope to demonstrate with the words that follow, so I suspect, do my friends at the UK Treasury.
The panel included the States of Guernsey’s chief economist, Dr Andy Sloan, who emphasised that this year and next, the UK government’s underlying borrowing requirement will be £120 billion per year. That is a new borrowing rate of more than a quarter of a million pounds a minute. But that is only part of the story of course, because the UK already has outstanding debt of around £1.2 trillion. The interest payments alone on that existing figure, even at such low rates, is £51 billion per year or if you prefer, as I do, because I am a simple soul, another £100,000 per minute. In crude terms the UK’s public finances are forecast to deteriorate at the equivalent of at least £6,000 per second for the next few years.
Against the backdrop of a massive fiscal deficit, weak global demand and a stagnant economy the UK government needs every penny it can get. While we would be able to provide the UK with a lesson on how to manage public finances, looking to Guernsey’s financial services sector’s clients for significant additional taxes won’t help them to any significant degree.
For evidence in support of that statement you need look no further that the European Savings tax Directive which netted the UK less than £2 million pounds a year in the lead up to us moving to a fully automatic exchange of information policy with all of the 27 member states of the European Union.
Prior to the introduction of a 25% tax on the interest on accounts held by citizens of EU member States, the UK predicted a tax recovery figure, from UK resident savers, many times greater than that figure.
The Chancellor of the Exchequer has now stated that he anticipates recovering around £1 billion over five years as a result of the US style FATCA framework agreement of enhanced information exchange with the three Crown Dependencies of Guernsey, Jersey and the Isle of Man. He believes more than £80 million will be recovered in the first year that these agreements are in operation.
It begs the question where from? Guernsey and the Isle of Man already have agreements in place whereby we automatically exchange information under the savings directive. Jersey has yet to move from a retention tax arrangement to automatic exchange.
Guernsey has an extremely diversified finance sector with captive insurance management and private equity fund administration in particular accounting for a significant part of our industry. The Isle of Man’s finance sector is tiny by comparison.
I was once told that Jersey’s industry is much more heavily reliant on the private wealth sector, with a suggestion that this element alone accounts for over 50 per cent of their industry.
If that is the case, then it naturally follows that they might have a greater exposure to the negative effects of so called UK FATCA. But if the UK Chancellor’s numbers stand any chance of being accurate then the impact on our cousins in Jersey would have to be enormous. Time will tell.
For Guernsey’s part, I think my colleagues at the Policy Council, very ably advised by our senior civil servants, have handled this matter admirably so far.
The devil is of course, usually in the detail and great care will be needed to ensure that the various definitions are properly clarified and agreed upon before our States is asked to vote on the domestic legislation which will bring this agreement into force during 2016.
Once again Guernsey is able to demonstrate that not only do we remain in the top tier of cooperative tax transparent jurisdictions willing to embrace international best practice, but that we are also much better at our arithmetic. Although the £1.6 million the UK received via the savings tax directive, the last time it was remitted in 2010 did help their fiscal cause, it was for less time than it has taken you to read this piece!

It is slightly ironic that you in this instance put such faith in the Treasury’ estimates of revenue recoveries from the agreements with Crown Dependencies. You and your associates at the Tax Justice Network were infinitely more critical of the Treasury’s estimates of the proceeds from the recent UK-Switzerland bilateral agreement. (http://www.taxjustice.net/cms/upload/pdf/TJN_1110_UK-Swiss_master.pdf).

This is not reflective of a consistent approach and does a disservice to your arguments.